The European Investment Bank (EIB) has frozen its activities in Ukraine, after the renewed wave of violence in Kiev left 26 people dead.

"For the time being the situation is so severe that it would
be politically the wrong signal, but also irresponsible vis-a-vis
the people we asked to do the job, to do active business in
Ukraine," Reuters quotes Werner Hoyer, the EIB President,
who said the Ukraine violence is the worst since the former
Soviet republic gained independence.

At least 26 people have been killed in Kiev as the Ukrainian capital
plunges back into chaos. Rioters have attacked police,
seized buildings, torched vehicles, and set up burning tire
barricades. Nine policemen are among the dead, all of whom died
from gunshot wounds.

The $1 billion worth government bond that matures in June reached
an all-time high of 27.99 percent, hopping 5.06 percentage points
during the afternoon. The hryvnia lost 1 percent against the US
dollar to 9.0 hitting a 5-year low. The main Ukrainian Equities
Index UX is consequently falling for the second day, losing 4.2
percent.

Even “brave heart” investors are getting out of assets
of Europe’s riskiest borrower, after President Viktor Yanukovich
told law enforcement to use “all means” necessary to restore
order.

The violence against protestors in Ukraine came in for harsh
criticisms from European countries with Poland, France and
Germany, urging sanctions against Ukrainian officials.

“The violent escalation of the political standoff brings
nothing good to external debt, especially in the short
term,” Vladimir Osakovskiy, a Moscow-based economist at Bank
of America Corp, told Reuters. “In the absence of clarity in
politics in the next few months, we see escalating risks for
Ukraine to service its debt.”

Ukraine has $17 billion of liabilities, excluding interest, due
to be repaid through the end of 2015, a record current-account
deficit and foreign reserves at the lowest level since 2006,
according to Bloomberg data.

Russian Finance Minister Anton Siluanov this week promised,
Moscow will provide a second bailout tranche worth $2 billion to Ukraine as part
of the $15 billion loan programme, after several weeks of stalled
payments to Kiev.

Rioting in Kiev renewed on February 18 after a break of several
weeks. Mass protests began in November after the government
decided not to sign an association agreement with EU. Since then
the political crisis in Ukraine has remained unresolved.